Category: Uncategorized

A cash dividend reduces the firm’s assets.​

Which of the following is the largest if the interest rate is 12 percent annually?​ 1. $100 compounded for three years 2. $100 annuity compounded for three years ​ 3. the present value of $100 received after three years

A financial intermediary creates claims on itself when it accepts depositors’ funds.

If the dividend growth model is used, the cost of equity depends on ​1. the firm’s earnings growth rate2. the current dividend payment3. the price of the stock

An increase in a current asset or long-term liability produces a cash inflow.​

The yield curve relates risk and interest rates.​

Pre-emptive rights mean that current stockholders have the right to maintain their proportionate ownership before new shares may be sold to the general public.​

Which of the following assets do not spontaneously vary with the level of sales?​ ​1. accounts receivable 2. equipment 3. plant

Pre-emptive rights mean that current stockholders have the right to maintain their proportionate ownership before new shares may be sold to the general public.​

Cash outflows that are not expenses (e.g., mortgage payments) are excluded from the cash budget.​